Good Stuff

Midterm Notes:

1) Three kinds of international business: exporting, foreign direct investment, Licensing/Franchising

a) Exporting- rendering/shipment of services and goods to a foreign buyer, many times a company’s first step into international business

i) Direct vs Indirect:

a. Direct: The exporter is responsible for export functions including marketing, export licensing, shipping and collecting payment

b. Indirect: If a company is unable to the mechanics of transactions with foreign buyers, they use specialized intermediaries that take on many export functions such as marketing, sales, finance and shipping.

b) Foreign direct investment: An active investment, ownership and operation of an ongoing business in another country other than their own

i) Home Country: The country under whose laws the company was created or is headquartered.

ii) Host Country: Where the company is going and doing business in

c) Licensing/Franchising:

i) Franchising: Business arrangement that uses an agreement to license, control and protect the use of the franchisor’s patents, trademarks, copyrights or business know how with a proven business plan. They also have to pay royalties and fees to the parent company/ Franchise.

ii) Licensing: A holder of intellectual property will grant certain rights (license) to another party under specified conditions, and for a specified times in return for consideration, such as a fee or royalty as part of a large business arrangement

2) Reverse Investment: foreign country doing business

3) Comparative Advantage: Sell what you are good at

4) MNC’s: Have significant revenue from more than one country and have significant foreign direct investment.

5) Repatriation: Can’t bring money back

6) Expropriation: The taking of privately owned assets with some compensation although in some countries it is often not.

7) Nationalization:

8) Trade Deficit: means we input more than we export

9) Services: surplus

10) Protectionism:...